Case Law Details
Avigna Properties Pvt Ltd Vs State Tax Officer (Madras High Court)
Deeming fiction of 70:30 formula attributable to construction service and land cost applies only when bifurcation is not provided
Madras High Court held that methodology of deeming fiction set out under notification 11/2017-Central Tax (Rate) dated 28.06.2017 (70:30 formula) attributable to construction services and cost of land will not apply in cases where the assessee is in a position to supply the actual amount of the consideration received towards construction services and land cost.
Facts-
The issues involved here is with regard to alleged short payment of output tax qua supply of construction services. The assessing authority refers to paragraph 2 of Notification 11/2017-Central Tax (Rate) dated 28.06.2017. According to him, in the case of supply of construction services involving the transfer of property in land or undivided interest in land, as the case may be, the value of supply services and goods shall be equivalent to the total amount charged for such supply less the value of land or undivided share of land, as the case may be. The value of land or undivided share of land shall, in such circumstances be deemed to be the development charges.
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